Promoting Egypt ... Solutions to attract Investment Funds
Due to global challenges and their impact on the rise and doubling of prices, the real estate sector, like all goods and services, will see price increases in the coming period, even if they are not equal to increases in the prices of execution inputs such as building materials, transportation, labour, and employment.
Over the last two months, oil prices have risen by 200 to 400%.
This is reflected in the cost of raw materials such as iron, cement, and aluminium, as well as transportation and other consumer items, necessitating wage and salary increases for workers.
Although raw material prices and operational expenses have doubled, real estate companies have been unable to raise unit prices to meet the cost increases. Hence, real estate companies adopt a gradual increase throughout the year in order to ensure sales continuity, especially since price increases influence purchasing power.
This puts real estate companies under a financial strain, necessitating the development of novel solutions to meet these challenges.
When we look at the Egyptian real estate market, we can see how it differs from many other markets, although they all face comparable issues that double construction costs.
As a result of the ongoing population increase and the existence of an accumulated deficit owing to the incapacity of the supply to satisfy the real demand, the Egyptian market has genuine and increasing demand factors.
Citizens have a perpetual demand for homes.
As a consequence, the sale process continues to meet actual requirements even as prices grow.
Not only that, but real estate has always been seen as a haven for savings in Egyptian society. Because of the surge in inflation and price increases, everyone with money will rush to buy real estate.
Despite the challenges and fluctuations, Egyptian real estate has the distinct advantage of not experiencing price reductions over time, even in the most severe of circumstances.
We did not find a property whose price had reduced or declined, indicating that it is a secure investment.
Furthermore, real estate offers growing returns on investment. The annual return on renting a housing unit varies from 8% to 10%, while keeping the asset, which is a unit with annual price rises in its worth.
According to all indications, investing in real estate in Egypt is the safest and most capable of generating growing returns. Egypt’s participation in MIPM2022 is expected to achieve certain objectives through showcasing Egypt’s current growth boom in infrastructure projects, highways, and new cities.
It also aims to promote Egypt’s various investment prospects, as well as real estate businesses, consultancy firms, and contracting firms, in order to help them form international alliances and attract investment funds.
We hope that complete data and information will be offered to investors in order to answer their questions and, as a consequence, contribute to the introduction of possibilities and investment components.
In order to attract foreign investment funds, we must also examine a number of incentives, the most significant of which is resolving the issue of double taxation. If a company creates an affiliated investment fund, it is responsible for paying all required taxes on both the fund and the company, as well as any fund earnings reinvested in the company.
This double taxation has a negative impact on the investment and targeted earnings.
Thus, giving the funds 5-year tax relief, for example, may be one way to attract them. This will help the real estate sector and the Egyptian economy as a whole to expand and break through.
